<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20539
(Mark One)
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For quarterly period ended June 30, 1996
---------------------------------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
-------------------- -------------------
For Quarter Ended June 30, 1996 Commission File No. 0-6994
--------------------------
MEXCO ENERGY CORPORATION
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(Exact name of registrant as specified in its charter)
Colorado 84-0627918
- - ------------------------------- -------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
214 W. Texas, Suite 1101, Midland, TX 79701
- - --------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (915) 682-1119
NONE
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(Former Name, Former Address & Former Fiscal Year if changed since
last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at June 30, 1996
- - ---------------------------- -------------------------------
Common stock, $.50 per value 1,423,229
1
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MEXCO ENERGY CORPORATION
Index
<TABLE>
<CAPTION>
Page
<S> <C>
Part I. Financial information:
Condensed balance sheet as of
March 31, 1996 and June 30, 1996 3
Condensed statements of operations
for the three months ended
June 30, 1996 and 1995 4
Condensed statements of cash flows
for the three months ended June 30,
1996 and 1995 5
Notes to condensed financial statements 6
Management's discussion and analysis of
financial condition and results of
operations 7
Part II. Other information: Not Applicable
</TABLE>
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<PAGE>
MEXCO ENERGY CORPORATION
CONDENSED BALANCE SHEETS
June 30, 1996 and March 31, 1996
ASSETS
------
<TABLE>
<CAPTION>
June 30, March 31,
1996 1996
------------ ------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 250,458 $ 172,112
Accounts receivable 129,145 108,583
Prepaid assets 1,350 -
----------- -----------
Total current assets 380,953 280,695
PROPERTY AND EQUIPMENT
Oil and gas properties-accounted for
under the full cost method 5,077,555 4,900,230
Office furniture and fixtures 2,431 2,431
----------- -----------
5,079,986 4,902,661
Less accumulated depreciation,
depletion and amortization ( 2,641,562) ( 2,571,317)
----------- -----------
Net property and equipment 2,438,424 2,331,344
----------- -----------
TOTAL ASSETS $ 2,819,377 $ 2,612,039
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
Accounts payable-trade $ 145,746 $ 32,584
Income taxes payable 21,149 -
----------- -----------
Total current liabilities 166,895 32,584
DEFERRED INCOME TAXES 37,537 34,310
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Total liabilities 204,432 66,894
STOCKHOLDERS' EQUITY
Common Stock-$.50 par value, authorized
5,000,000, issued and outstanding-
1,423,229 711,614 711,614
Paid in capital 1,975,429 1,975,429
Retained earnings ( 72,098) ( 141,898)
----------- -----------
Total stockholders' equity 2,614,945 2,545,145
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TOTAL LIABILITIES & EQUITY $ 2,819,377 $ 2,612,039
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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<PAGE>
MEXCO ENERGY CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
Three months ended June 30
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
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<S> <C> <C>
Revenues:
Gross revenues from oil and gas
production $267,014 $171,724
Production costs 70,856 51,559
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Net revenues from oil and gas
production 196,158 120,165
Administrative service charges and
reimbursements 1,252 2,486
-------- --------
Total revenues 197,410 122,651
Costs and expenses:
Depreciation, depletion and amortization 70,245 50,534
General and administrative 35,160 25,586
Other income - -
Interest income ( 2,171) ( 2,467)
-------- --------
Total costs and expenses 103,234 73,653
Income before income tax expense 94,176 48,998
Income tax expense 24,376 3,553
-------- --------
NET INCOME $ 69,800 $ 45,445
======== ========
Net income per share $ .05 $ .04
======== ========
Weighted average common shares
outstanding 1,423,229 1,173,229
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE>
MEXCO ENERGY CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
Three Months ended June 30
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
- - ------------------------------------
Cash received from oil and gas operations $ 281,883 $ 177,956
Cash paid for oil and gas operating expenses ( 85,442) ( 6,109)
General and administrative expenses ( 20,780) ( 25,136)
Interest received 2,171 2,467
Income Taxes paid ( 4,361) ( 38,523)
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Net cash provided by operations 173,471 110,655
Cash flows from investing activities:
- - ------------------------------------
Capital expenditures ( 95,125) (169,411)
Sales of assets - -
--------- ---------
Net cash provided by (used in)
investing activities ( 95,125) (169,411)
--------- ---------
Net increase (decrease) in cash and cash
equivalents 78,346 ( 58,756)
Cash and cash equivalents at the beginning
of the period 172,112 220,974
--------- ---------
Cash and cash equivalents at the end
of the period $ 250,458 $ 162,218
========= =========
Reconciliation of net income to net
- - -----------------------------------
cash provided by operating activities:
-------------------------------------
Net income $ 69,800 $ 45,445
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Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation, depletion and amortization 70,245 50,534
(Increase) Decrease in accounts receivable ( 20,562) 4,774
Increase (Decrease) in accounts payable 30,962 44,422
Decrease (Increase) in prepaid expenses ( 1,350) 450
Increase (Decrease) in income taxes payable 24,376 ( 34,970)
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Total adjustments 103,671 65,210
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Net cash provided by operating activities $ 173,471 $ 110,655
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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<PAGE>
MEXCO ENERGY CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
June 30, 1996 and 1995
MANAGEMENT COMMENTS
In the opinion of the Company, the accompanying unaudited financial statements
contain all adjustments necessary to present fairly the financial position of
the Company as of March 31, 1996 and June 30, 1996, the results of its
operations for the three months ended June 30, 1996 and 1995, and the cash flows
for the three months ended June 30, 1996 and 1995. All adjustments are of a
normal and recurring nature.
In June 1966, the Registrant purchased an additional 2.5% (net 1.875%) working
interest comprising approximately 520 acres, including eleven (11) wells located
on producing and non-producing oil and gas leases in the Lazy JL Field, Garza
County, Texas.
In July 1996 the Registrant purchased a 30% (net 22.5%) working interest in
approximately 1,000 acres of non-producing oil and gas leases adjacent to the
Lazy JL Field, Garza County, Texas.
The condensed balance sheet as of March 31, 1996 has been prepared based upon
the Registrant's audited balance sheet as of that date.
-6-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE CONDENSED STATEMENTS OF OPERATIONS
Results of Operations - 3 Months Ended June 30, 1996
- - ----------------------------------------------------
Operating revenues increased $95,290 (55%) from the first quarter of fiscal 1995
due to the increase in oil and gas production from additions of oil and gas
properties. Revenues from gas increased $50,868 (106%) due to increased numbers
of wells, acquisitions and higher gas prices. Oil revenues increased $44,422
(36%) due to increased numbers of wells, acquisitions and higher oil prices.
The average oil price for the first quarter, 1996 was $20.77 per barrel compared
to $18.26 per barrel in the first quarter of 1995. The average gas price for
first quarter, 1996 was $2.12 per MCF compared to $1.23 per MCF in the first
quarter of 1995.
Production costs increased $19,297 (37%) due to increased lease operating
expenses primarily as a result of addition of oil and gas properties.
Depreciation, depletion and amortization increased $19,711 (39%) as compared to
the same quarter during the prior year due to the addition of oil and gas
properties.
General and administrative costs increased $9,574 (37%) due to increased
accounting and engineering costs.
Interest income decreased $296 (12%) due to decreased funds invested in money
market accounts.
During the quarter, the Company participated in the drilling of one (1) well
(37.5 % working interest and 28.125% net revenue interest) in the Lazy JL (Lower
Spraberry) Field of Garza County, Texas.
Financial Condition
- - -------------------
Working Capital decreased by $34,053 as compared to March 31, 1996, primarily
due to the drilling and the purchase of oil and gas properties.
The increase in cash and cash and cash equivalents reflects increased revenues
due to acquisitions and drilling activity.
Management cannot specifically identify the effects of inflation and other price
changes on operations.
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<PAGE>
Signatures
- - ----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MEXCO ENERGY CORPORATION
(A Colorado Corporation)
-------------------------------
Nicholas C. Taylor,
President and Treasurer
Date: August 1, 1996
-8-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BALANCE
SHEET AND STATEMENT OF OPERATIONS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 12-MOS
<FISCAL-YEAR-END> MAR-31-1997 MAR-31-1996
<PERIOD-START> APR-01-1996 APR-01-1995
<PERIOD-END> JUN-30-1996 MAR-31-1996
<CASH> 250,458 172,112
<SECURITIES> 0 0
<RECEIVABLES> 129,145<F1> 108,583<F2>
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 380,953 280,695
<PP&E> 5,079,986 4,902,661
<DEPRECIATION> 2,641,562 2,571,317
<TOTAL-ASSETS> 2,819,377 2,612,039
<CURRENT-LIABILITIES> 166,895 32,584
<BONDS> 0 0
0 0
0 0
<COMMON> 711,614 711,614
<OTHER-SE> 1,903,331 1,833,531
<TOTAL-LIABILITY-AND-EQUITY> 2,819,377 2,612,039
<SALES> 267,014 798,589
<TOTAL-REVENUES> 270,437 834,073
<CGS> 70,856 272,892
<TOTAL-COSTS> 141,101 535,284
<OTHER-EXPENSES> 35,160 86,484
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 94,176 212,305
<INCOME-TAX> 24,376 11,699
<INCOME-CONTINUING> 69,800 200,606
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 69,800 200,606
<EPS-PRIMARY> .05 .15
<EPS-DILUTED> .05 .15
<FN>
<F1>INCLUDES $34,380 FROM A RELATED PARTY
<F2>INCLUDES $12,297 FROM A RELATED PARTY
</FN>
</TABLE>
